Russia has proposed new criminal penalties targeting unregistered cryptocurrency miners operating outside the tax system.
The draft amendments were introduced by Russia’s Ministry of Justice and published earlier this week.
Officials said the proposal responds to widespread non-compliance within the domestic crypto mining sector.
Under the draft, illegal crypto mining could carry fines of up to 1.5 million rubles.
Offenders could also face up to two years of forced labour.
Authorities said harsher penalties would apply in cases involving large profits.
Mining activity deemed to have generated outsized gains could result in prison sentences of up to five years.
Such cases may also attract fines of up to 2.5 million rubles.
The draft includes provisions covering organised groups involved in illegal mining.
Organised mining operations could face forced labour or imprisonment for up to five years.
Officials said the measures aim to bring more miners into the formal economy.
The government requires miners to submit monthly tax declarations on digital currency production.
Despite existing rules, compliance remains limited across the sector.
Only around 30% of crypto miners were registered as of mid-June.
Deputy finance minister Ivan Chebeskov said many miners remain outside the legal framework.
Our general approach was to bring this industry out of the shadows as much as possible.
Ivan Chebeskov said.
He added that authorities have not yet completed that process.
Russian regulations classify small-scale miners differently from industrial operators.
Individuals consuming less than 6,000 kilowatt-hours per month can mine without registration.
These miners must still declare income and pay personal income tax on mined assets.
The classification was set out in a decree published in November 2024.
Finance minister Anton Siluanov said 1,364 miners were registered by late October.
He shared the figure during a plenary session of the State Duma.
Russia introduced a formal legal framework for crypto mining in August 2024.
President Vladimir Putin signed the mining laws into force later that year.
The framework took effect on Nov. 1, 2024.
It imposed mandatory registration and tax reporting for miners and infrastructure providers.
The law also banned foreign entities from conducting mining operations in Russia.
Authorities were granted powers to restrict mining in certain regions.
Critics said the rules stop short of fully legalising crypto mining.
Officials said the new penalties are intended to improve enforcement.
The draft signals a firmer stance as Russia seeks to capture tax revenue from mining.